CARES Act Impact on Home Health Agencies

Written by John Meindl, CFA, Brad Parker, CPA/ABV and Michael Riskind

The United States Congress passed the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) on March 27, 2020, which addresses the need to maintain quality care across the healthcare spectrum in an attempt to control the surge of the Coronavirus Disease (“COVID-19”). Contained within the CARES Act are several provisions specific to the home health industry and home health agencies.

Home health agencies and operators in the industry had already been grappling with the effects of the Patient-Driven Groupings Model (“PDGM”), considered by many in the industry to be the most significant change in the home health payment mechanism since the adoption of the Prospective Payment System. In short, PDGM cuts the payment periods for home health episodes in half (from 60 to 30 days) and classifies each 30-day period of care into payment categories based on clinical nature/patient background, among other changes. Now, an industry dealing with a sea change in payment methodology must now prepare to adjust further as a result of COVID-19 and the CARES Act.

The CARES Act includes four (4) sections which directly address the home health industry. These four sections are summarized below.

1.) 3705. TEMPORARY WAIVER OF REQUIREMENT FOR FACE-TO-FACE VISITS BETWEEN HOME DIALYSIS PATIENTS AND PHYSICIANS. (1)

Prior to the CARES Act, end stage renal dialysis clinical assessments were required to be performed in-person, on a monthly basis, with the use of telehealth capabilities explicitly disallowed. Section 3705 of the CARES Act amends the Social Security Act to allow the requirement for face-to-face visits to be waved during an emergency period at the discretion of the Secretary of HHS.

2.) 3706. USE OF TELEHEALTH TO CONDUCT FACE-TO-FACE ENCOUNTER PRIOR TO RECERTIFICATION OF ELIGIBILITY FOR HOSPICE CARE DURING EMERGENCY PERIOD. (2)

Prior to the CARES Act, recertification for continuation of hospice care—required every 180 days—was required to be conducted in-person, face-to-face. Section 3706 amends this language to allow a hospice physician or nurse practitioner to supplement a face-to-face encounter with a telehealth encounter. This amendment applies only for the duration of COVID-19, or any other emergency period in the future.

It is important to note that while the COVID-19 pandemic qualifies as an emergency period, each case must be assessed and deemed appropriate at the discretion of the Secretary of HHS.

3.) 3707. ENCOURAGING USE OF TELECOMMUNICATIONS SYSTEMS FOR HOME HEALTH SERVICES FURNISHED DURING EMERGENCY PERIOD. (3)

The Secretary of HHS—through the CARES Act—is considering ways to encourage the use of telecommunication for purposes of rendering remote patient monitoring including, but not limited to:

Part-time / intermittent nursing care;

Physical or occupational therapy or speech pathology services;

Medical social services under the direction of a physician;

Part time / intermittent services of a home health aide;

Medical supplies and DME; and

In the case of a home health agency joint-venture with a hospital, services rendered by intern or resident-in-training under a teaching program.

Section 3707 addresses the need for outpatient post-acute services to transition from in-person, face-to-face encounters to telehealth encounters. These potential provisions would aide patients in complying with COVID-19 guidelines set in The President’s Coronavirus Guidelines for America: 30 Days to Slow the Spread, issued by the White House on March 16th, 2020.

Prior to the CARES Act, requirements mandated that a physician certification was needed for the continuation of home health services. With the amendments currently in place, the requirements for certification have been expanded to allow for a nurse practitioner, clinical nurse specialist, or physician assistant to order (or certify the continuation of) home health services.

VMG HEALTH TAKEAWAY:

Heading into 2020, market participants widely expected PDGM to accelerate M&A activity in the home health and hospice industry, as the smaller, more rural home health agencies would struggle to stay afloat under this new payment model. Now, those same market participants are finding the healthcare system to be in a state of panic, causing yet more change for home health agencies and causing all participants to refocus their day-to-day operations.

Lawmakers identified the need to relax regulations on certain physician certifications for paperwork to aide home health agency operators in their internal operations. This temporary pullback in regulation will help market participants operate more efficiently, when they need it most. However, as the COVID-19 pandemic continues, regulations seem to be changing almost as fast as the virus itself is growing. The key for home health and hospice operators to survive this pandemic will depend on how they adapt to new regulatory framework.